"Sellers dominate." What will happen to bitcoin in the coming week
On Sunday, February 5, bitcoin is trading at $23.3 thousand, its price rose by 1.6% over the past seven days. The specialist analyzed the situation on the market and assessed the prospects of bitcoin movement in the next seven days.
"The price is at an important level."
BitRiver financial analyst
In the week from January 30 to February 5, bitcoin renewed its high of $24,253, but failed to hold the high. By the close of the week, the BTC/USDt pair was down 1.61% to $23,359. The key events for the exchanges were the U.S. Federal Reserve's meeting, J. Powell's press conference and the report on the U.S. labor market for January.
Just before the U.S. Federal Reserve's meeting, bitcoin was down to $22,500. Investors were nervous because they did not know what J. Powell was going to say. The Fed raised its benchmark interest rate by 25 basis points to 4.50-4.75% at the end of February's meeting. Since the decision coincided with market expectations, traders began to actively sell the dollar. As it weakened and stock indices rose, bitcoin rose to $24,255.
Buyers had no luck with the growth, because on Thursday, after the ECB meeting, the euro rate turned sharply downward. Following the meeting, the European Central Bank raised all three key interest rates by 50 basis points (bps). The decision coincided with market expectations. The regulator said it intends to continue raising rates by 50bp at its next meeting in March. Investors were taking profits on long positions, which they took from the falling dollar on expectations of a rate hike from the U.S. Fed and the ECB.
The labor market report due on Friday (February 3) might have triggered them to fix profits. According to the latest data of the US Department of Labor, the unemployment rate in the country unexpectedly declined to 3.4% from 3.5% in December, while the number of employed in non-farm industries increased by 517 thousand. The forecast was 185 thousand. The index for December was revised upward to 260 thousand from 223 thousand.
The dollar index jumped to 102.85 p. The S&P 500 index fell to 4128 (-1.03%), bitcoin to $23,204. Bad statistics came out for bitcoin buyers, as such figures untie the hands of the US Federal Reserve to raise rates more or tighten monetary policy longer. Sellers are dominating this weekend but without fanaticism.
If we turn to the technical analysis, on the weekly and daily charts, the situation for bitcoin is not critical for the buyers. They need to hold on to the $22,750 level and keep pushing higher above $25,000. Daily exchange trading volumes are still high. The price is at an important level, so seller activity has increased. If the buyers win in the battle, then next week we expect a breakthrough at the level of 25,000.
It would be good to stay above the level of 23 thousand within 3-5 days. The flat in a narrow band will allow the technical indicators to unload for the continuation of growth and pass an upward correction of the dollar index. A sellers' victory will push buyers back to the $21,000-$22,000 zone.
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